LAST close (Feb 7): 97.99, off 2.32 points, points from a week ago. Week’s high: 100.34 points; Week’s low: 97.69 points.
The Second Board Index (SBI) broke below its recent congestion levels during the shortened three-day trading week and ended lower on light selling pressure.
Chart-wise, the SBI is technically negative and is expected to resume its sideways-to-lower trend this week. Chart-support for this week is adjusted lower to the 95-97 level. Breaching of this immediate chart-support could generate fresh bearish momentum and take the index lower to establish fresh base below the 93-point level. Chart-resistance for this week is lowered to the 99-98 level.
The daily and weekly technical indicators closed the week mostly negative and indicated further declines in the index this week.
The 3/7 day simple moving average lines: The 3/7 day simple moving-average price-lines ended the week bearish and signalled that the downward wave is intact. The 3-day MAV-line ended the week below the 7-day MAV-line at 98.61 and 99.59 points respectively.
Daily stochastics: The daily stochastics triggered the sell-signal on Feb 7 and indicated that the market is in a bearish extended-move phase. The daily oscillator per cent K ended below the oscillator per cent D at 15.58% and 18.83% respectively. The weekly stochastic triggered the sell-signal last week and signalled that a downward cycle has begun. The weekly oscillator per cent K settled below the oscillator per cent D at 35.77% and 58.64% respectively.
Daily moving-average convergence/divergence (MACD): The daily MACD retained its bearish last week and called for a lower trading level this week. The daily MACD and trigger-line closed lower in the positive territory at minus 0.17 points and minus 0.16 points respectively. The weekly MACD failed to indicate a change in the main trend. The weekly oscillator MACD and trigger-line closed fractionally higher at minus 4.16 and minus 4.61 points respectively.
Daily relative strength index (RSI): The daily RSI plunged from a weekly-high of 45.17 points on February 5 and ended the week sharply lower at 40.41 points. Analysis of the daily RSI indicates that the underlying strength of the market is still bearish. The weekly RSI extended on its downtrend and closed lower at 35.11 points. Analysis of the weekly RSI indicates that the nearterm market has not reached its technically oversold levels.
Daily momentum index: The daily MI (not shown in the chart) eased from a weekly-high of 96.25 points on Feb 5 and ended lower in the negative territory at 92.48 points. Analysis of the daily MI indicates that the index’s immediate momentum is negative. The weekly MI settled the week in the negative territory and finished the week slightly lower at 98.07 points. The weekly MI indicates that the index’s near-term direction is bearish.
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